Borouge Q1 2024 Net Profit Soars By 37% To $273 Million Amidst Market Challenges
Borouge Plc, a leading provider of innovative and sustainable polyolefin solutions, has announced a significant 37% year-on-year increase in its first-quarter net profit, reaching $273 million. This impressive growth is attributed to stronger pricing premia, driven by the company's focus on high-value product segments and cost efficiencies. Borouge's strategic positioning in key growth markets across the Asia Pacific, the Middle East, and Africa has been instrumental in this achievement, offering premium solutions tailored to sectors such as infrastructure, energy, agriculture, specialty packaging, and healthcare.
The company reported a notable increase in the price premium for its polyethylene and polypropylene products. Specifically, the premium for polyethylene widened to $222 per tonne, marking a 19% increase from the previous quarter. Similarly, the premium for polypropylene saw a 46% quarterly rise to $162 per tonne. These improvements are supported by a significant reduction in the overall cost base, which decreased by 20% year-on-year and 18% from the previous quarter to $739 million. Consequently, Borouge's industry-leading EBITDA margin improved to 44%, up from 40% in the fourth quarter.
At its Annual General Meeting on March 28th, Borouge reiterated its commitment to maintaining a $1.3 billion dividend in 2024. This dividend, equivalent to 15.88 fils per share, represents a current yield of 6.5%. Hazeem Sultan Al Suwaidi, Chief Executive Officer of Borouge, expressed confidence in the company's continued success and resilience amidst challenging global market conditions. He highlighted Borouge's industry leadership across various metrics including profitability, price premia, operational excellence, and efficiency.
Al Suwaidi further emphasized the company's strategic focus on high-value segments, strong customer relationships in rapidly growing economies, and maximized geographic reach. Continuous product innovation and a commitment to excellence in all business aspects are key pillars of Borouge's strategy. He also mentioned that the Borouge 4 production facility is over 60% completed. This new plant will increase annual capacity by 28% to 6.4 million tonnes and incorporate advanced technology to enhance the company's product profile. Additionally, Borouge is exploring accelerated global growth opportunities, including a significant project in the Asia Pacific region that has reached the feasibility stage.
Borouge's disciplined approach to managing its cost base has been pivotal in achieving these results. The success of its Value Enhancement Programme in 2023 exceeded targets and contributed positively with an impact of $607 million in 2023. This disciplined approach and strategic focus underscore Borouge's position as a leader in the polyolefin industry and its potential for sustained growth and innovation.
With inputs from WAM
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